The survey revealed 43% of OMBs thought red tape was harmful and companies had little confidence in the government’s pledge to reduce the burden with 92% of firms expecting it to increase over the next 12 months.

Senior partner Michael Snyder said: ‘Small and medium-sized companies clearly view the UK’s red tape burden as a hindrance to job creation and a restraint on growth. Companies are very sceptical as to whether the government’s stated aim to reduce red tape will be translated into reality.

‘The chancellor needs to use the forthcoming Budget to take concrete steps to cut the existing bureaucratic burden on businesses.’

According to Kingston Smith, not only does red tape discourage firms from expanding their workforce, it is also a major factor in encouraging entrepreneurs to get out of business.